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Clinical Psychology Manual Policy Guidelines 
 
 
 
 
 
Version 2019 Page 1 of 9 
 
 
NEW YORK STATE MEDICAID 
PROGRAM 
 
 
CLINICAL PSYCHOLOGY MANUAL 
 
POLICY GUIDELINES 
 
 
 
 
Clinical Psychology Manual Policy Guidelines 
 
 
 
 
 
Version 2019 Page 2 of 9 
 
 
 
Table of Contents 
 
SECTION I - REQUIREMENTS FOR PARTICIPATION IN MEDICAID -------------------------------------------- 3 
REPORTING REQUIREMENT --------------------------------------------------------------------------------------------------- 3 
RECORDS TO BE MAINTAINED ------------------------------------------------------------------------------------------------ 3 
SECTION II - CLINICAL PSYCHOLOGY SERVICES ------------------------------------------------------------------ 5 
INDIVIDUAL PSYCHOTHERAPY ------------------------------------------------------------------------------------------------ 5 
GROUP PSYCHOTHERAPY----------------------------------------------------------------------------------------------------- 6 
PSYCHOLOGICAL TESTING ---------------------------------------------------------------------------------------------------- 6 
MEDICARE CROSS-OVER ------------------------------------------------------------------------------------------------------ 6 
SECTION III - BASIS OF PAYMENT FOR SERVICES PROVIDED ------------------------------------------------ 7 
REFERRAL REQUIREMENT ---------------------------------------------------------------------------------------------------- 8 
COLLABORATION REQUIREMENT --------------------------------------------------------------------------------------------- 8 
SECTION IV - UNACCEPTABLE PRACTICES -------------------------------------------------------------------------- 8 
 
 
 
Clinical Psychology Manual Policy Guidelines 
 
 
 
 
 
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Section I - Requirements for Participation in Medicaid 
Clinical psychological services must be rendered in accordance with the standards of 
good practice that are outlined in the Rules and Regulations of the New York State 
Education Department and the Code of Ethics of the New York State Psychological 
Association. If, after extended psychological care, the recipient's prognosis is not 
favorable, consideration should be given to curtailing or discontinuing psychological 
services and/or initiating other means of care. 
Only licensed professionals may provide care. License requirements are established by 
the New York State Department of Education (NYSED), and can be found at 
http://www.op.nysed.gov/prof/. 
Professionals are required to follow regulations found at http://www.health.ny.gov/ 
regulations/nycrr/title_18/, and by conducting a search for "505.18". 
Reporting Requirement 
Since psychological services rendered under New York State Medicaid are considered 
part of a comprehensive approach to health care, a clinical psychologist who treats a 
Medicaid recipient must send a suitable written report to the referring physician, clinic, 
or other referral source. If therapy extends for more than five sessions, the source of the 
referral must be kept informed through additional periodic written reports. 
Records to be Maintained 
Clinical psychologists must maintain complete legible records in English for each 
recipient. Records must contain information sufficient to justify the diagnosis and 
warrant the treatment of each Medicaid recipient served. 
Records should include as a minimum, but not be limited to, the following: 
• The full name, address and Medicaid identification number (CIN) of each recipient 
evaluated, tested and/or treated and the date and clock times for each session for 
which a bill is submitted; 
• A copy of the patient’s written referral for psychological services; 
http://www.op.nysed.gov/prof/
http://www.op.nysed.gov/prof/
http://www.op.nysed.gov/prof/
http://www.health.ny.gov/regulations/nycrr/title_18/
http://www.health.ny.gov/regulations/nycrr/title_18/
http://www.health.ny.gov/regulations/nycrr/title_18/
http://www.health.ny.gov/regulations/nycrr/title_18/
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• Current diagnosis as contained in the ICD-10-CM, including any diagnostic 
impressions made for each session; 
 
• A description of the recipient’s problems, strengths, conditions, disabilities and 
needs; 
 
• A statement of the goals and objectives of treatment to address the recipient’s 
problems, disabilities and needs, including an estimate of the duration of the 
recipient’s need for treatment, a description of the proposed treatment and 
prognosis; 
 
• Progress notes providing a chronological description of the recipient’s progress in 
relation to the goals and objectives of the established plan of treatment; 
 
• Documentation of collaboration with the patient’s personal physician or other 
appropriate medical provider; 
 
• A copy of the written report(s) sent to the patient’s referral source; and 
 
• A summary of the recipient’s condition and disposition when treatment is 
completed or terminated. 
 
Recipient clinical records must be retained for six years in accordance with established 
Medicaid regulations. 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Section II - Clinical Psychology Services 
 
Under the New York State Medical Assistance Program (Medicaid), the services of 
licensed private practicing clinical psychologists are available to eligible individuals as 
part of their comprehensive health care. Reimbursable services include psychological 
testing, evaluation and the various therapeutic procedures that are appropriate for the 
given personality or behavior disorder. 
 
Licensed private practicing clinical psychologists will be reimbursed by Medicaid only for 
the services they personally provide on a private practitioner basis and will not be 
reimbursed for services rendered in a facility (e.g. clinic) from which the clinical 
psychologist receives a salary or other compensation. Licensed private practicing 
clinical psychologists who receive payment for psychology services under Early 
Intervention, pre-school, or school-age supportive health service programs will not be 
reimbursed on a fee-for-service basis by Medicaid for the services they render in that 
setting. 
 
Individual Psychotherapy 
 
The individual psychotherapy code is to be used to bill for evaluative/therapeutic 
sessions lasting a minimum of 37 minutes involving the patient alone or a collateral, with 
or without the patient present. A couple's therapy session, even when both persons 
involved are Medicaid eligible, is considered a single psychotherapy session. 
 
A one-hour individual psychotherapy session involves approximately 45 to 50 minutes of 
face-to-face patient contact time (i.e., the "therapeutic hour"). In order to be considered 
a Medicaid reimbursable service, an individual session must involve a minimum of 37 
minutes of patient contact time. A session which lasts less than a "therapeutic hour" due 
to circumstances beyond the control of the psychologist, or at his/her professional 
discretion, is not considered to be reimbursable when patient contact is terminated 
before 37 minutes. 
 
An extended individual psychotherapy session involving a minimum patient contact time 
of one and one-quarter hours (75 minutes) is reimbursable when medically necessary 
due to extenuating circumstances, (e.g., a crisis management session). A crisis 
management session is usually an unscheduled session or an unscheduled extension 
of a scheduled session. Extended psychotherapy sessions are reimbursable for crisis 
management when their purpose is the reduction of acute emotional distresswhich is 
characterized by the need for immediate attention. Regularly scheduled sessions lasting 
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longer than one-hour for patient convenience are not reimbursable as extended 
sessions. 
 
Group Psychotherapy 
 
The group psychotherapy code is to be used to bill for therapeutic sessions of one and 
one-half hours when two or more non-collateral patients are seen in the same setting, at 
the same time, for a similar therapeutic purpose. The session is to be limited to not 
more than eight patients. 
 
Psychological Testing 
 
The psychological testing code is to be used to bill for the individual administration of 
recognized, standardized mental health assessment procedures, including behavior 
rating and adaptive behavior scales, projective techniques and cognitive/intellectual and 
personality assessment. Patient interviews (i.e., the taking of a social history or an 
assessment using similar checklist/questionnaire techniques) are considered evaluative 
sessions and are not billable as psychological testing. 
 
 
Simultaneous testing of more than one individual (i.e., group administration) is 
reimbursable only when objective and mechanical tests (i.e., self-reporting scales) are 
administered to more than one person at the same time due to unusual patient-specific 
circumstances which must be documented in the patients' records. It must also be 
documented that test conditions allowed the psychologist direct access to, and 
continuous monitoring of each patient so tested, but did not compromise patient 
confidentiality, detract from test integrity, compromise test validity, nor adversely impact 
individual performance. Under no circumstances may more than two individuals be 
tested simultaneously. Medicaid reimbursement is not available for routine group 
administration of psychological tests. 
 
Medicare Cross-over 
 
Reimbursement for Medicare cost-sharing expenses (co-insurance and deductible) for 
dually eligibles may be claimed when the service has been approved by Medicare and 
meets Medicare’s conditions for coverage of psychological services, which may differ 
from those used in defining reimbursable services under Medicaid. Medicare/Medicaid 
crossover claims should use the closest comparable coding available in the Procedure 
Codes and Fee Schedule section of this manual. 
 
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Section III - Basis of Payment for Services Provided 
 
Only services which are personally provided by an enrolled licensed private practicing 
clinical psychologist may be reimbursed by New York State Medicaid. 
 
A psychologist enrolled in the Medicare Program must comply with departmental 
requirements found in Social Services regulations at 18 NYCRR 505.18. These 
requirements include: 
 
• Licensure to practice psychology in accordance with Article 153 of the New York 
State Education Law; and 
 
• Completion of at least three years of training or has at least three years of 
supervised experience in clinical psychology; and 
 
• Current engagement in professional practice, at least half of which is devoted to 
providing clinical psychological services 
 
Note: Medicaid reimbursement is not available for either the supervision of, or the 
services provided by unlicensed psychological interns, trainees or assistants or 
anyone else who may otherwise legally provide such services. 
 
Under New York State Medicaid, licensed private practicing clinical psychologists will 
be reimbursed on the basis of time in accordance with the fees that are listed in the 
Procedure Codes and Fee Schedule section of this manual. 
 
The fees include payment for the face-to-face encounter with the patient and/or 
collateral, the preparation for that encounter and the post-encounter services including 
analysis or review of records or tests, updating of records and communication with the 
referent or patient through written reports and telephone contact. 
 
A collateral is a member of the patient's family or household who regularly interacts with 
the patient and is directly affected by, or has the capability of affecting, the patient's 
condition. The purpose of collateral services is to assist in the diagnosis, evaluation and 
therapy of the patient by gathering information to assure appropriate planning of care, to 
ameliorate those factors of the home environment which interfere with treatment goals 
and to encourage continuation of a therapeutic environment in the home setting. An 
occasion of collateral service shall be billed against the primary patient's Medicaid 
identification number. 
 
 
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Psychological testing services are reimbursable when used for the diagnosis, evaluation 
or assessment of mental illness, emotional disturbance and personality or behavioral 
disorders. 
 
For more information on fees, please refer to the Procedure Codes and Fee Schedule 
Section of this Manual. 
 
Referral Requirement 
 
All recipients who are under the care of a licensed private practicing clinical psychologist 
must have been referred in writing for such services by either the patient's personal 
physician or nurse practitioner, a medical director in an industrial concern, an 
appropriate school official, or an official of a voluntary health or social agency. 
 
Collaboration Requirement 
 
Except for the services of initial diagnostic evaluation and testing, the services of clinical 
psychologists must be rendered in collaboration with the recipient’s physician or other 
appropriate practitioners who render medical services to the recipient. 
 
The practitioner may be either the recipient’s personal physician or nurse practitioner or 
a practitioner who is associated with a clinic that serves that individual. The participation 
of the recipient’s personal physician and other medical practitioners is considered 
essential to comprehensive health care. 
 
 
 
 
Section IV - Unacceptable Practices 
 
In addition to the guidelines that appear in the Information for All Providers, General 
Policy Section of this Manual, private practicing clinical psychologists are specifically 
prohibited from engaging in practices considered unacceptable, including, but not 
limited to the following: 
 
• Offering cash payments to physicians, clinics or others who refer recipients for 
psychological services; 
 
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• Billing for services that are available free of charge to the general public; 
 
• Billing for services rendered to recipients who were not properly referred; and 
 
• Billing for services rendered, in part or entirely, by individuals other than the 
enrolled licensed clinical psychologist. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
	Section I - Requirements for Participation in Medicaid
	Reporting Requirement
	Records to be Maintained
	Section II - Clinical Psychology Services
	Individual Psychotherapy
	Group Psychotherapy
	Psychological Testing
	Medicare Cross-over
	Section III - Basis of Payment for Services Provided
	Referral Requirement
	Collaboration Requirement
	Section IV - Unacceptable Practices